Offsite methodologies were among proposed solutions to the UK’s housing crisis, covered at the ‘Addressing the UK Housing Challenge’ conference in London.

LONDON CONFERENCE PROVIDES UK INSIGHTS

RAPID URBANISATION AND A MUSHROOMING POPULATION COMBINED WITH A LONG-TERM DEARTH OF NEW HOME BUILDING HAVE CREATED WHAT MANY ARE NOW TERMING A ‘BROKEN’ UK HOUSING MARKET. A RECENT CONFERENCE IN LONDON ORGANISED BY UK CAMPAIGNING ORGANISATION BUILDOFFSITE PROVIDED A SNAPSHOT OF CURRENT CHALLENGES, WITH OFFSITE METHODOLOGIES FEATURING IN PROPOSED SOLUTIONS. BELINDA SMART REPORTS.

Titled ‘Addressing the UK Housing Challenge’ and organised by Buildoffsite in partnership with Enterprise Ireland and Invest Northern Ireland (with a view to promoting Ireland’s construction capabilities) the event took place at the Irish Embassy in London on 25 May and brought together suppliers of housing solutions as well as a range of other stakeholders.

“The key mega trends influencing the future direction of the property market include health and wellbeing; the workplace; technology and demographic shifts,” Hale noted, adding that in turn these played into factors such as the growth of commuting and homeworking, online retail and the impact of an ageing population.

Hale indicated that the demise of affordable housing for private ownership pointed to the exponential growth of the PRS private rented sector (PRS). She also noted that a key trend going forward would be the rise of single person living. Demand for state-of-the-art technology would also be a key factor for home seekers going forward, with 51 per cent of respondents in a recent Strutt & Parker survey citing better broadband as a key reason for relocating.

Meanwhile new home seeking tribes and housing typologies were emerging, including what she termed ‘The Waltons’ – the emergence of changing family structures – resulting in a growing need for intergenerational housing in future; and ‘MeCos’ – who put personal health and wellbeing at a premium and want their home to reflect this, favouring what’s being termed a HEAL (Healthy Eating Active Living) House. Another emerging trend was the Micro Mansion. As urbanisation gathers pace around the world, central locations in the most sought-after cities have become price-inaccessible for many. The answer? Meticulously designed and planned tiny urban living spaces. Meanwhile the idea of the ‘Modern Village’ was key. As living in major cities becomes increasingly unaffordable, people are migrating out of major cities to modern villages offering traditional village staples such as a local school, village green, church and pub as well as modern amenities including flexispace offering a mix of start-ups and retail, diverse housing stock including rental, retirement and healthy living, as well as optimised broadband and public transport.

Given the rise of PRS, it was no surprise that Hale also noted: “There’s a marked cultural shift towards renting. People want greater choice involving less cost but they also want the opportunity to rent a high quality place. They’re looking for great local amenities; recycling is cited as key along with bike storage and car spaces. The key word here is flexibility. It’s about delivering housing differently; not just about the bricks and mortar.”

Shamez Alibhai, Partner at Cheyne Capital echoed this sentiment, presenting on ‘New Forms of Capital for Housing Delivery.’ He observed that a key mission of the fund was to measure the social as well as financial impacts of developments.

He noted that given population growth, future housing stock would need to accommodate 10 million people over the next 25 years meaning “affordability is a key constraint.”

With subdued wage growth representing “the new normal” the traditional delivery model was broken and new alternatives were being sought. Among these the fund was assessing the merits of offsite methodologies, however Alibhai also noted that offsite did carry risks, including: the need to safeguard against default and substitution; the need to ensure a zero defect manufacturing environment (how do you recall 500 homes?); how to mortgage such developments; and the challenges involved with implementing just in time manufacturing.

Ray Theakston, Construction Director for Essential Living, a developer and operator of private rental homes, presented on the nuts and bolts of volumetric delivery of BTR (build to rent). Theakston cited The Farmer Review of the UK Construction Labour Model, which noted unprecedented rises in the cost of construction since 2013, and tied in with the company’s decision in 2015 to adopt a different construction methodology. As a volumetric producer, Essential Living was able to build apartments in a factory at the same time as foundations were being laid, with a system utilising a reinforced concrete frame structure and the insertion of modules.

Brendan Geraghty – Founding Partner of Geraghty Taylor Architects, presented on ‘BTR – How to create the right product’ and began by stressing that the key to success was upfront design. “Develop your concept well before you develop your product. We design from the inside out. It used to be the inverse. Now we take a really customer focused approach that views the rental tenant as a client.”

An ethos of “brand before building” meant defining all aspects of the business proposition, from product quality to services options and operating standards before designing the building, he said. Meanwhile such developments have the potential to be “dramatically digitally enabled” using smart technology to link design, delivery, operations, revenue collection, service provision, customer communication and data collection. Data could be used to detect errors and hone efficiencies to ensure client satisfaction. Capturing data also allowed the development of improved products for future projects.

The event concluded with a panel discussion including Dennis Watson, Head of Real Estate, Barclays Corporate, Ana Nekhamkin, Managing Director, Inhabit – a PRS developer launched in 2016 and with sites in Manchester, Liverpool, Leeds, Glasgow, Aberdeen, Birmingham and Bristol; and Giles Carter, Operating Partner, TDR Capital, a private equity firm, which in early 2017 backed the launch of Ilke Homes, a joint venture between Keepmoat and modular construction specialist Elliott (both owned by TDR).

Inhabit’s Ana Nekhamkin confirmed that the vertically integrated company was “very mindful of keeping costs down, particularly for regional centres”. She indicated the company was considering offsite methodologies but added that as many of its schemes were not designed from inception for modular, offsite could present challenges.

Giles Carter of TDR Capital confirmed Ilke Homes presented a new paradigm in terms of homebuilding. Using a rigorously controlled off-site environment, the company offers a range of customisable low rise housing products that meet the UK’s new national and local space standards and zero carbon homes standards. Carter noted that such a paradigm shift needed a new way of thinking and designing. “It’s a bit like asking: ‘How do I get my CD into my iPod?’ We really need to re-evaluate the whole value stack.”

To a question about finance, Dennis Watson of Barclays Corporate indicated mortgages still presented challenges for the UK offsite sector, but added that progress in this area was being made – “providers are getting there.” TDR Capital’s Giles Carter added that BOPAS (Buildoffsite Property Assurance Scheme) had helped make offsite construction doable in the UK. The scheme provides assurance to the lending community that innovatively constructed properties against which they may be lending, will deliver a consistent performance over a determined durability of 60 years. ■